Credit Suisse has developed the Credit Suisse Global Nanotechnology Index, which focuses on companies offering nanotechnology products.
Based on the index, two structured products have now been launched to allow investors to participate in potential growth in this sector.
Nanotechnology is defined as an enabling technology stemming from changes in the intrinsic characteristics of materials when size scales are reduced to the nanometer level. In other words, processes at the nanometer level enable the creation of materials with new properties.
Some early applications of nanotechnology already exist with, for example, cold-resistant and waterproof clothing, mud-resistant car bodies, OLED-based TV and transparent solar panels. It is expected that more will be in store in the near future, with regard to applications and services that are likely to quickly develop commercially.
Credit Suisse estimates a growth per annum between +10% and +25% by 2010 in the five nanotechnology sectors defined below. The Credit Suisse Global Nanotechnology Index was launched in anticipation of this development.
The Nanotechnology Index universe encompasses five sectors, i.e. nano materials, nano information technology, nano healthcare, nano tools, and nano energy/others. The Credit Suisse Global Nanotechnology Index series offers investors exposure to 25 stocks representative of the nanotechnology universe worldwide.
The rule-based index methodology enables selection of the largest companies in each sector, based on market capitalisation and other criteria, including free float and daily traded volume. Companies must also realise more than 10% of their sales, or display leadership, in nanotechnology.
From the investor’s perspective, the Credit Suisse Global Nanotechnology Index permits financial exposure to an industry whose economic and social importance we expect will increase steadily and is consequently aimed at long-term oriented investors.
The Index is rebalanced every six months to select new market leaders in each sector and also makes it possible to react to various corporate activities such as IPOs and new nanotechnology initiatives from existing firms. This dynamic element is critical to ensure a reliable representation of rapidly changing markets for nanotechnology.